To beat high euro zone prices, how about visiting a European country where the prices are low and the locals love the USA? It’s a country of medieval monasteries, Turkish bazaars, ski resorts, three national parks great for hiking, and an increasingly cosmopolitan capital city. Its biggest tourist draw is the deepest lake in Europe which has more historic and cultural sites around its shores than many countries can claim for their entire territory.

I’m talking about Macedonia, a tiny Balkan nation of 2 million people sandwiched between Albania, Serbia, Bulgaria and Greece. In April I spent three weeks there. It’s a country of postcard pretty villages set among rolling green hills whose most prominent feature is a Turkish minaret or an Orthodox church. Never the two side by side.

Macedonians are hospitable but not intrusive. I was never hassled by con artists and only a few times approached for handouts which in the Balkans hardly counts. (It’s not advisable to give unless you want to attract a crowd or are seeking to develop a long-term relationship.).

Compared with my earlier visits, the capital Skopje (pronounced SKO-pee-ya) now has an almost glitzy feel to it. A Via Veneto world of sofas, chairs and tables have sprouted up along the Vardar River in the heart of downtown. Roller-bladers whiz by, tykes on starter bikes wobble, three generations of one family amble along the quayside, and lovers walk arm in arm.

Leggy Balkan beauties sit deep in the sofas, snuggling up to grizzled, big-necked wheeler-dealers in track suits. Everyone is furiously cell phoning – making deals, arranging to see lovers, showing off with camera phones. Over the din of the Vardar, swollen with Spring rain and snowmelt from the mountains, there is a cacophony of canned music from the bars and cafes, competing with performance artists and musicians playing Mozart. The scene lasts all day until late at night.

Skopje wasn’t always thus. Five years ago when I was last there, the city had an edgy, depressed, socialist-realism-gone-sour air to it. Serbs and Albanians were fighting next door in Kosovo, and 300,000 Kosovar Albanian refugees had flooded into Macedonia, threatening the delicate ethnic balance between Macedonian Christians and the mainly Muslim Albanian minority.

I stayed at the Aleksandar Palace Hotel – on the outskirts of the city - and each morning I woke up to see Italian peacekeepers revving up their helicopters in a field next to the hotel to fly to Kosovo, less than 10 miles away. NATO forces were thick on the ground in Macedonia.

A favored souvenir of the time was a Zippo lighter adorned with the KFOR (NATO Kosovo Force) insignia which was hawked everywhere by street peddlers. In Skopje the only topic of conversation was the crisis. Macedonians were certain that the fighting next door was about to engulf their country.

They were right. In February 2001, Macedonian forces ambushed Albanian insurgents in a small village north of Skopje in retaliation for an attack on a police station. Fighting spread to Albanian majority areas in the west of the country near the Albanian border and to Skopje itself.

This could have turned into a full-scale Balkan war but it didn’t because cooler heads on both sides of the ethnic divide prevailed. By the end of 2001, an agreement had been reached under which Albanian fighters laid down their arms in return for constitutional changes guaranteeing greater rights for the Albanian minority.

In late 2004, it looked like the peace deal was about to unravel. Macedonian hardliners forced a national referendum on new municipal laws intended to enhance Albanian representation, but voters, fearing a renewal of ethnic fighting if the measure passed, stayed away from the polls. After the referendum failed, Ermira Mehmeti, a leading Albanian politician, said: "The people have shown they want to live in a multiethnic state which promotes European values and concepts.”

Greece had objected to the name Macedonia when the country gained its independence in 1991, claiming that name was exclusively Greek, so the international community adopted the expedient of calling it the Former Yugoslav Republic of Macedonia (FYROM). Late in 2004, after the referendum failed, the U.S. decided to reward Macedonia for its “political maturity” by dropping FYROM in its dealings with the country. This set off waves of jubilation in Macedonia and raised hopes that the European Union would follow suit.

Given this history, it’s not surprising that the U.S. and Americans are extremely popular across the ethnic divide in Macedonia. The Slavic Macedonians praise the U.S. for being the first to jettison FYROM, and the Albanians remember all that the U.S. did to protect their kin in Kosovo.

If you go, you’ll find that Skopje is a great walking city. A good starting point is the Holiday Inn on the Vardar quayside. It’s adjacent to the Trgovski Centar (Central Shopping Center) which 5 years ago was a crumbling communist relic.

Now it offers the likes of Benetton, Mango, zillions of stores hawking their version of the ideal cell phone deal, and a good Italian restaurant (“da Gino’s”) where for under $10 you can order a tasty lasagna dish, a huge mixed salad, and a small bottle of a mellow, dry Macedonian red wine named T’ga za Jug (“Longing for the South”), after an iconic 19th century poem written by a homesick Macedonian poet during a dismal Russian winter.

Another low-cost eatery is St. Patrick’s Irish Pub where you can order Guinness on tap but stay clear of the Irish specialties which are frankly awful. You’re better off ordering a Macedonian dish. The shopska salad (fresh tomato, cucumber, grated cheese) is great for lunch.

Walk all the way through the shopping center and exit at the far end. You are now in Ploshtad Makedonija (Macedonia Square) where you’ll see a plaque marking the spot where Mother Theresa’s house once stood. Mother Theresa was born to Albanian parents in Skopje in 1910, baptized in the Roman Catholic Cathedral as Gonxha Bojaxhiu, and spent the first 18 years of her life in Skopje. You can see how tiny the house was from its outline drawn on the paving stones.

Albanians reasonably ask why the plaque is in English and Macedonian, but not Albanian. Still, Mother Theresa always downplayed ethnic issues. On her last visit to Skopje in 1980, Mother Theresa was asked about her ethnicity but ducked the issue, saying "I am a citizen of Skopje, my city of birth, but now belong to the world."

In 1963 Skopje was brutally defaced by a disastrous earthquake that leveled 90% of the city. Communist-era construction and years of neglect have also taken their toll. But now, on Boulevard Makedonija, Skopje’s main shopping street, avant garde shops and art galleries are popping up – and a new Best Western Hotel has opened.

Down the street across from the old railway station is the historic Bristol Hotel, with its spotless Edwardian dining room, which the English novelist Rebecca West visited in 1937 on her Balkan odyssey, out of which came her famous memoir Black Lamb and Grey Falcon.

The old railway station has been transformed into the City Museum of Skopje, but its shattered facade is kept as a perpetual reminder of the earthquake. The large railway clock still shows 5:17, the precise time the quake hit early one morning in July.

The Vardar River bisects the city of Skopje, separating the northern section, where the population is mostly Albanian Muslims, from the southern section which is mostly Orthodox Christians.

These worlds meet up on the pedestrians-only Stone Bridge built by the Turks in the 15th century on the foundations of an earlier Roman bridge.

The bridge, heavily damaged in 2001, has been authentically restored except that reflector lights have been added in the paving stones to make it easier to walk across at night.

Once you cross the bridge, you enter a different world where minarets soar over silver domes and where men in white skull-caps play backgammon, drink small glasses of tea, and talk politics. You are now in the old Turkish Bazaar (Stara Charshiya) which miraculously escaped damage in the earthquake of 1963. This is a world of small handicraft shops – tailors, cobblers, quilt makers, tinsmiths.

You never see the Albanian flag in downtown Skopje but you do here. It’s everywhere. Also wall posters are in Albanian - hardly ever in Cyrillic. Excursions to Tirana and Istanbul are advertised instead of the usual European destinations. And Turkish Efes beer eclipses Skopsko, the favorite Macedonian brew on the other side of the river.

The Stara Charshiya has such a different feel that many tourists come here just to wander around, breathe in the atmosphere and have a meal. You’ll find the people very friendly. But don’t overlook the area’s historical and cultural sites.

Just steps over the Stone Bridge is the Daut Pasha Turkish Bath built in the 15th century and converted into the modernistic Skopje Art Gallery. The furnaces are now whitewashed exhibition rooms and in the evening, chamber concerts grace what had been a bathhouse.

Nearby is the Mustapha Pasha Mosque, built in 1519, with its mesmerizing arabesque wall design and strikingly tall minaret. The Sveti Spas (Holy Salvation) Church is famed for its wood-carved iconostasis. And for a spectacular view of the mountains, river and city, climb up to the Kale fortress built by the Turks of stone blocks harvested from the old Roman city of Skupi.

The Charshiya has many great places to eat, such as the Kapan An, once a Turkish trading inn with interior courtyards and wooden-balconied guest rooms, not more than a five minute walk from the Stone Bridge. There are three restaurants inside Kapan An and three kebab eateries outside. My favorite is “Babillon,” as in Iraq, where you can order 10 delicious grilled beef kebabs with onion, delicious Turkish bread, a large mixed salad and a bottle of Efes beer, all for under $10.

Ethnic tensions still exist but they are sufficiently beneath the surface as to be imperceptible to the casual visitor to Macedonia. For the Albanians, an irritant is a huge steel Orthodox cross built on Mount Vodno to the south of Skopje during 2002. At night the cross is illuminated and shines in the face of Albanian Muslims to the north of the river, particularly as they walk over the Stone Bridge to the modern city. Similarly, Christians are irked by the blasting out of the call to prayer five times a day from the city’s 30 mosques, particularly when the volume is cranked up. For Saturday night revelers, the pre-dawn prayer that jolts them from their sleep at 5 a.m. on Sunday mornings is a pain.

It’s not easy for the casual visitor to guess a person’s ethnicity in Macedonia unless there is some giveaway like an Islamic-style head covering for a woman or a white skull-cap for a man. But these accessories are far from universal. And to further complicate things, there are other minorities in Macedonia such as Serbs, Bulgarians, Turks, Vlachs, and Roma. Most city-dwellers tend to dress in normal European attire, whatever their ethnicity. People come together in the modern downtown during the day but tend to stick to their side of the river for their night life.

Macedonia is inexpensive but still, it pays to look at prices carefully. Once I almost ordered a bottle of Vino Nobile di Montepulciano in a restaurant for about $8. I thought was a good deal – but it was too good. The price was really $80 at the current exchange rate of 47 Macedonian denars to the dollar. As a general rule, stick to Macedonian wines which are cheap and good value, particularly the red wines from the southern wine-growing region of Tikves. And I heartily recommend Skopsko, the local lager.

In most restaurants the local specialties are reasonably priced such as Turkish-style grilled beef, chicken or lamb, gyuvech which is a tasty stewed chicken, burek which are pastries stuffed with veggies, feta cheese or meat, and chorba which are thick, tasty Balkan soups. Also try pindzhur, a baked or stir-fried dish composed of peppers, eggplant and tomato, and tarator, a delicious yoghurt and cucumber salad or soup served cold.

Taxis in Skopje are cheap. The initial charge is just over $1 and that will get you to most places in the downtown. The whole country is about the size of New Hampshire, and it’s easy and cheap to get around by intercity bus.

It takes about three hours to get from Skopje to Ohrid, landlocked Macedonia’s premier summer resort and ersatz seaside. The town’s breezy lakeshore is lined with cafes and give striking views of the lake and hills.

Ancient Orthodox churches and monasteries dot the cobblestone streets of the Old Town and overlook the lake’s shores. Ohrid holds a special place in the Orthodox ecclesiastical world. This was where Saint Clement of Ohrid first put into daily use the Cyrillic alphabet devised by Saints Cyril and Methodius. In the town, thanks to UNESCO protection, the architectural legacy of Yugoslav socialism is scarcely visible.

As you stoop your way through churches in Ohrid, you are probably wondering why Macedonian churches have such low ceilings. The answer lies in the 500 years of Ottoman rule. All churches had to be physically and symbolically lower than mosques. Most churches from the Ottoman era still operate in cellars.

Bitola, the second city of Macedonia with 80,000 people, sits on a plateau near the Greek border and at one time was one of the major cities of the Ottoman Empire. Named Monastir for the number of monasteries in the area, the city was the Empire’s gateway to Europe and over a dozen countries had consulates there. Every second home was said to have a piano.

Kemal Ataturk, the father of modern Turkey, attended the military academy there. Worth a visit are the nearby ruins of Heraclea, a city founded in the 4th century BC by Philip II of Macedonia and later conquered by the Romans.

Popova Sapka – in the extreme northwest of the country at an altitude of 6000 feet - is an attractive winter sports center. Because of its favorable snow conditions and good value for money, it attracts devotees of winter sports from all over Europe. In summer hiking in Macedonia’s three national parks - Pelister, Galicica and Mavrovo - is popular, particularly Galicica because of its proximity to Lake Ohrid.

With failed or failing states dominating the news, it’s nice to reflect on a country that has stepped back from the brink. A few years ago Macedonia seemed hopelessly broken. Today Macedonia is at peace – and a mood of cautious optimism is taking root.

If you do go, pick up a copy of Thammy Evans’ Macedonia (Bradt Travel Series), the only real guidebook devoted exclusively to Macedonia. It’s heavy on history but it gives you the context that allows you to understand what you will see in Macedonia.

Gerald Zarr is a freelance writer, consultant on international development, lecturer, and retired member of the U. S. Foreign Service.

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